Lecture 3 – Diagnosis: overview

what is diagnosis? why is it important? the open systems approach to

diagnosis characteristics common to Open

Systems diagnostic models organisation level diagnosis

Module Learning Objectives Addressed

Explain the importance of diagnosis in the overall organisational change process

Understand principles that facilitate effective diagnosis

Understand the 3 levels of diagnostic analysis that can be performed (as per the Open Systems Model)

What is diagnosis?

An orderly or reliable way of gathering data to identify how the organisation is functioning currently

Diagnosis is typically used to identify problems & opportunities

The collection of data informs the choice of intervention. Put another way, diagnosis precedes intervention

Note: there are various diagnostic instruments (designed to highlight a particular part of the change process e.g.. is the entity ready for change?), or the organisation’s function (e.g.. its structure), but our interest is in the whole of organisation

Whole of organisation diagnosis implicates diagnostic models

Importance of diagnostic models (Burke , in Palmer, Dunford & Akin 2006)

Managers carry around in their heads implicit models of how things work. The problem with implicit models is that they’re based on personal experience – therefore not generalisable.

In any organisation, literally thousands of things are going on at any time. Models reduce this complexity to a user-friendly, more manageable number of categories

This categorising allows more effective identification of organisation parts that warrant close attention

It allows us to see how system parts are interconnected It provides us with a ‘common language’ with which to

discuss organisational characteristics

Diagnostic models: clarification

There are scores of models available Each model is a simplification of reality. Each model emphasises different parts of organisation

life Each reflects its creator’s views (& biases). Also

means in most cases the model has been exposed to scrutiny by peers & attracted at least some support

Diagnostic models are not change strategies. They provide pictures of how things are

Change strategies follow on from diagnosis

Open Systems Diagnostic modelVarious assumptions inherent in systems thinking … Systems are comprised of numerous subsystems … all

interacting … but in combination working as a functioning unit.

Open systems interact with their environments. Environmental factors influence org. behaviour (e.g.. via laws, availability of labour etc.), but organisations also influence environment (e.g.. medical labs. with development of new treatments for illnesses)

Various elements of open systems are common, regardless of level of inquiry/application

Characteristics common to open systems diagnostic models

Inputs; acquired from the organisation’s environment Transformations; what happens in the organisation whereby the inputs are converted to outputsOutputs; products or services that are transformed by the organisation/system and sent to the environment

Boundaries; permeable & often indistinct borders of the organisation

Feedback; information fed back into the organisation, whereby this information influences or changes the functioning of the system

Equifinality; whereby similar outcomes or results may be possible using different initial conditions and in many different ways

Alignment; or ‘fit’. Diagnosis is described as the search for misfit among the various parts & subsystems of the organisation

Open Systems Model

Source Waddell, Cumming and Worley (2011) Organisation Change -Development & transformation 4 th edn. Cengage Learning , South Melbourne Australia

Organisation-Level Diagnostic Model

Inputs

GeneralEnvironment

IndustryStructure

Design Components Outputs

Source Waddell, Cumming and Worley (2007) Organisation Development & Change. Nelson, South Melbourne Australia

Strategy

Organisation design

Organisation performance

Productivity

Stakeholder satisfaction

Organisation level diagnosis

1. InputsTwo key inputs viz. general environment & industry

structure. Both dynamic … change over time

1. 1 General environment Combination of various forces that individually or

collectively can influence whether or not organisational objectives are achieved

Environment includes social, techno., economic, ecological, political events/influences

Organisation level diagnosis

1. Inputs…continued

1.2 Industry Structure (task environment) Five key forces/influences

Suppliers, buyers/customers, threats of entry (new competitors), threats of substitutes, rivalry among competitors

Other writers include movement in the labour market, in which skills shortages for example can hinder efforts to expand or meet tight deadlines

Organisation level diagnosis

2. Design components or strategic orientation phase (the transformation part of the Open Systems model)

There are 5 components to this part of the model

2.1 Strategy … includes The organisation’s mission (e.g.. long term purpose, range of

offerings, markets etc.) Its goals & objectives (specific statements that identify priorities,

and the bases for organising work activities) Strategic intent (the above specifies which goals … here the

focus is on how) Functional policies (putting policies into action, including

procedures & rules)

Organisation level diagnosis

2. Design components or strategic orientation phase (the transformation part of the Open Systems model)

2.2 Technology … includes Ways by which inputs are converted to goods and

services Includes focus on production methods, work flows,

equipment Note how parts of the techno. system in the

organisation may require high interdependence (e.g. when different depts. combine to develop or bring out a new product). Your diagnosis would need to uncover these interdependencies.

Organisation level diagnosis

2. Strategic Orientation (the transformation part of the Open systems model) …continued

2.3 structural system How the work to be done is broken down into departments,

cost centres or sub-units, from which jobs and tasks can be allocated

Two ways of identifying how this work is broken down– Identify its formal structure (functional, divisional, network,

matrix?)– Examine its level of differentiation & integration

Diagnosis involving investigation of differentiation (would involve the degree of difference in design between different departments or subunits) & integration (the way in which an organisation co-ordinates work from its various departments/subunits)

Organisation level diagnosis2. Strategic Orientation (the transformation part of the

Open systems model) …continued

2.4 Measurement systems Methods of collecting and interpreting data and

disseminating info with reference to performance of groups & individuals

Used to uncover and control deviations from specified goals

Monitoring is implicit in this operation Accuracy in measurement and timely info.

help to legitimise findings

Organisation level diagnosis

2. Strategic Orientation (the transformation part of the Open systems model) …continued

2.5 Human resource systems Strategy and technologies used inform the organisation about

which skills and knowledge types are needed The locus for attending to the suite of functional HR activities

and developing required skills and knowledge (recruit. & selection, training & development, performance appraisal, remuneration)

Note that rewards must align with measurement systems (assumes individual & group performances can be measured in an objective way)

Organisation level diagnosis

2. Strategic Orientation (the transformation part of the Open systems model) …continued

The below component is described by Waddell et al as an ‘intermediate output’ but for our purposes it fits ok with other transformations … things that happen to inputs

2.6 Organisational/corporate culture Shared assumptions, beliefs, values, norms, Powerful influences on thoughts and actions/behaviour Is the prevailing culture strong? Does it endorse high

performance? A non-supportive culture can undermine the best

otherwise-integrated system

Organisation level diagnosis

Outputs Represented by 3 categories 1. Organisational performance,

Financial measures e.g. profits, ROI, earnings per share

2. Productivity, Measures used to assess efficiencies

e.g. reject rates per 100 units made

3. Stakeholder satisfaction Various stakeholders … various

measures

Alignment between org.-level parts

Diagnosis of alignment usually means an investigation of …

Whether or not the strategic orientation (the transformations part) fits with inputs e.g. does structure accommodate uncertainties in the environment?

Do all the elements of strategy fit with each other? e.g. do the rules and procedures support risk taking if innovation &

creativity are at the heart of the operation? Do the elements of organisation design fit with each other?

e.g. is the reward system sufficiently flexible to reinforce routine desired behaviour in production, and creative and frame-breaking activity in other parts?

Do the items in organisation design support the strategy?

Goal Clarity

Task TeamStructure Functioning

Group GroupComposition Norms

Design Components Outputs

Organisation

Design

TeamEffectiveness

Group-Level Diagnostic Model

Inputs

Source Waddell, Cumming and Worley (2007) Organisation Development & Change. Thomson, South Melbourne Australia

Group level diagnosis

The template for diagnosis at this 2nd level is the same (inputs, transformations, outputs etc)

Note: many larger organisations have departments that behave (and in some instances, have similar numbers of staff) as organisations. It can be useful to overlay the organisation-wide diagnostic template over their operation.

Realise or appreciate how the elements take on different forms (e.g. organisation design shapes/influences how groups are set up … design then becomes an input at this level)

skill Variety

Task Identity Autonomy

Task Feedback Significance about Results

Individual-Level Diagnostic Model

Inputs Design Components OutputsOrganisati

onDesign

Group Design

PersonalTraits

IndividualEffectiveness

Source Waddell, Cumming and Worley (2007) Organisation Development & Change. Thomson, South Melbourne Australia

Diagnosis at the individual level

Note how the two levels of design (organisation-level & group) both have the capacity to influence individual behaviour … they are inputs at this individual level of diagnosis

Consider … what are some of the benefits of cross-functional work teams?

How might this impact on individual behaviour?

Summary – this section on diagnosis Diagnosis is the data collection phase that precedes

intervention Diagnosis attempts to portray how the organisation is

functioning Problems and opportunities can be identified through this

diagnosis activity The open systems model informs this module – we have

considered this at 3 levels of functioning, but others are possible.

Regardless of level, the various properties or elements of the open systems model are applied during diagnosis

There are numerous other models of diagnosis.

Testing understanding

Which of the below items best summarises and describes the relationship between diagnosis and intervention?(a) there is no relationship because the two activities are carried out by different interests(b) diagnosis informs intervention(c) intervention informs diagnosis(d) diagnosis can only occur after the entry of a change consultant

Testing understanding

In a large international magazine producer’s (e.g.. Cosmopolitan Mag.) organisational structure, the production facility has to work to tight time deadlines, and there are clear distinctions and roles between the various levels of management. However, the journalists who write for this magazine are typically given licence to organise their time and energies, and few meetings are held with this set. This example illustrates which of the below?(a) permeable boundaries(b) equifinality(c) high differentiation(d) Cosmo. is not a good place to work

Testing understanding

Many companies operate with limited human resource management, preferring to outsource some of the HRM functions. However, if this isn’t done effectively it can hinder organisational functioning, especially if there’s little consistency with performance appraisal and performance management in different areas, or differences in the ways that people are paid. Which of the below is most evident in such a scenario?(a) weak integration(b) high differentiation(c) culture is out of alignment with strategy(d) myopic management